Ascending Your Way To Bigger Profits

I recently had a coaching call with an entrepreneur who has grown his company to several hundred thousand dollars by providing one valuable service: web programming and design.

While he’s done extremely well, we discussed methods by which he can expand his product offering, increase his long-term customer value, and deliver a greater result (a la The Growth Factor) using The Income Ascension Pyramid.

This is a concept I first discovered while studying the business model used by Tony Robbins back in 2005. From an “outsider-looking-in” perspective, here’s how it looks:

The closer you get to Tony Robbins, the more you have to pay. Most of his customers enter the funnel by way of a book or CD/DVD/online program (hence the wider base of the pyramid), and some will ascend all the way to the top – where the elite few pay Tony Robbins $1,000,000 a year, plus 5% of increase in revenues.

The Income Ascension Pyramid is the classic 80/20 principle – 80% of your profits will come from 20% of your customers.

And as Perry Marshall points out, 80% of your profits from that initial 20% of your customers will come from just 20% of them (in other words, 20% of the 20%).

You see, when you deliver a service that’s providing people with a greater advantage, result, and value, there’s always someone willing to give you more money for an even greater result… Or in Tony’s case, just to get more personal attention.

The auto industry has an ascension model…

The least expensive model is on the bottom of the pyramid… Moving upwards. Of course, within each brand, there’s another ascension ranging from the Lexus CT Hybrid (starting at $32,200), all the way up to the LS – which starts at $120,440.

Too many companies leave too much money on the table by simply not giving their prospects enough to buy.

Here’s The Income Ascension Model we created as an example for a Centurion Level client of ours (this is the top of our pyramid, where clients apply to work one-on-one with me, and I create and manage their marketing for them – and they’ve paid me almost a million dollars for this service).

Let’s take a look at how this plays out – and how it will add to your bottom line.

Here’s an example from a coaching client of mine:

She has roughly 10,000 customers that have paid her an average of $40 apiece. If she did nothing but maintain her product offering (without creating any higher end or lateral products), her average customer value would bounce around $40.

However, if she was to implement The Income Ascension Model, here’s how the output would change.

(Source: 8020curve.com)

This tells us, based on the Pareto principle, that while the majority (the 80%) of people have an average customer value of < $40… Look at how much money the additional 20% would contribute if given the chance.

Over 500 people would spend 250% more money, and 4% of the total population would be willing to invest thousands of dollars!

This model works exceptionally well in markets that are competitive (i.e., business), hobby related (i.e., golf), or tied directly to enhanced sexual attraction (i.e., weight loss). People in these markets have a ravenous appetite for quality products and spend irrationally to get the greatest result possible.

Are you offering a range of products/services to attract these voracious buyers?